- The muni market, including NAD, has been facing some weakness. I would use that as an opportunity to build to positions.
- Duration risk in the sector is high, so rising inflation metrics do have me concerned about total return. This is why I would time my purchases very carefully.
- Credit risk, especially in the investment grade realm, remains very limited. Municipal tax receipts recovered quickly since the first half of 2020, and I see minimal defaults going forward.
- The calls for higher tax rates remain an important tailwind, although there are other legislative actions that could mitigate this impact.
For further details see:
NAD: Recent Sell-Off Looks Like A Buying Opportunity To Me